SGDNZD unable to break through key resistance level
Singapore Dollar/New Zealand Dollar (SGDNZD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
SGDNZD finished the month -2.56% lower at 1.1117 after losing 60 pips (-0.54%) today on low volume. Closing below Monday's low at 1.1146, the market confirmed its breakout through the previous session low after trading up to 40 pips below it intraday.
Daily Candlestick Chart (SGDNZD as at Jun 30, 2020):
Tuesday's trading range has been 104 pips (0.93%), that's slightly above the last trading month's daily average range of 100 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for SGDNZD.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 1.1106 during the day, the FX pair found support at the 20-day moving average at 1.1114. The last time this happened on May 18th, SGDNZD actually lost -0.52% on the following trading day. Unable to break through the key technical resistance level at 1.1210 (R1), the currency closed below it after spiking up to 1.1210 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move above 1.1217 in the prior session, the forex pair ran into sellers again around the same price level today, failing to move higher than 1.1210.
Though SGD/NZD is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 1.1217 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 1.1020 where further sell stops might get triggered. With prices trading close to this year's low at 1.0954, downside momentum could accelerate should the pair break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for SGD/NZD. Out of 601 times, SGDNZD closed lower 56.57% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.74% with an average market move of -0.09%.